States around the country are putting up more of a fight against runaway production with aggressive incentive plans meant to draw film and commercialmakers to their respective regions. Most recently, Florida, Illinois and Utah began using new programs to attract film, television and commercial production.
One such program recently went into effect in Florida: A long-in-the-works state law to allocate money for filmmakers officially received funding. A total of $2.4 million was set aside in the state budget to fund a program in which filmmakers would be reimbursed 15 percent for qualified expenditures up to $2 million on features; $450,000 on TV movies and pilots; $25,000 for commercials; and $15,000 for industrial and corporate films. The funds are available on a first-come, first-served basis, and apply to projects that spend at least $850,000 on Florida labor and Florida-based production and production-service companies.
There is also a provision for digital media shops, allowing for a five percent reimbursement of their annual gross revenues, up to $100,000. Companies that relocate to the state can also receive five percent of their gross annual revenue, as much as $200,000. The state began accepting applications on June 15.
The program took three years to get off the ground. First, a bill to establish the incentive program died, then the following year, according to Susan Albershardt, commissioner of the Florida Governor’s Office of Film & Entertainment, "the house and the senate got their ducks in a row. That bill passed unanimously. The governor signed it into law last year, but in order to get it passed, they stripped all the funding off of it, so we had a statute that said we had this incentive fund, but there was no money to fund it."
In the following year’s budget, Florida Gov. Jeb Bush allotted $3 million for the incentive program. After intense lobbying by Florida film, television and commercial industry professionals, the current bill was passed. "Everybody in our industry was saying the same thing with the same voice," notes Albershardt, "and that was, ‘We need it.’ "
Indeed, even though Florida remains the third busiest state in terms of production, business has dropped off in the last 18 months as nearby states, the Caribbean Islands and other foreign locales have lured filmmakers with their own incentives.
"We look at [this year’s program] as seed money," Albershardt explains, "to test [the program] and see how it works, if it brings business into the state. The program is not based on tax credits; we took money out of the state’s general revenue. We are just reimbursing filmmakers for hiring Floridians and using Florida-based companies. When the fund is exhausted, that’s it. Then we’ll take all the applications we couldn’t accept [because of lack of funding] and say to the legislature, ‘Look at all the work we could have gotten if you had given us more money.’ "
Although it just went into effect with no paid advertising, the program has already attracted interest from a "major studio," reports Albershardt, which plans to shoot a $50 million feature film in the state. As of press time, no commercials have yet taken advantage of the program.
Florida is also continuing its two-year-old sales tax exemption program to lure in production work. The roughly seven percent sales tax is waived for qualified applicants. "We don’t even make you pay it," states Albershardt. "We just give it to you upfront. [For instance,] you go into Home Depot, you show them your certificate and they don’t charge you tax [on film-related purchases]."
Utah
Utah has recently put its own incentive programs in place. According to Leigh von der Esch, executive director of the Utah Film Commission, the state senate passed a bill to create a motion picture task force to examine the entire industry, "with respect to everything from commercials to television to feature film production to special effects, and see how we could position ourselves for the future."
Perhaps more significantly—or at least more immediately—the legislature passed another bill, which authorized a state sales and use tax exemption on motion picture equipment for production and post. The exemption went into effect July 1, and applies to features, commercials and TV shows shot in Utah by resident and visiting producers.
The Utah legislature also authorized putting 20 percent of the state’s longstanding Industrial Assistance Fund toward special economic development opportunities, one of which is filmmaking. The film commission developed a plan, which went into effect at the end of May, where those funds go toward rebates to be paid to producers shooting in the state.
The governor’s economic development board set aside $1 million to create "a demonstration program on a performance-based rebate," von der Esch reports. "When you make a movie in the state, if you spend a dollar, you get ten cents back. We hope we can develop a return-on-investment scenario that shows that this is a valuable program [for attracting] more work to the state, and that the [government will] make it permanent and give us more money. In approving the initial one million, the board said we have the ability to come back and replenish it if we can show we have people waiting to use it."
So far, she’s gotten one film application, with two more expected shortly. "We also got a call expressing interest from Disney," she relates.
Illinois
Illinois has had its incentive program up and running since Jan. 1, and its state film commissioner rates it a success. It is a 25 percent tax credit on Illinois workers’ wages per production. (Excluded from the tax credit are the two highest paid Illinois workers on a project.) Workers must be Illinois residents hired for a qualified feature, TV program, commercial or sponsored content piece lensed in the state. Projects for advertising purposes (30 minutes or less), including spots and branded entertainment, can receive the tax credit as long as each has a minimum of $50,000 in wages being paid to Illinois residents. (For features and TV programs, each production will have to spend at least $100,000 on Illinois labor in order to be eligible for the tax credit.)
"If a production comes to town and spends one million dollars on Illinois employees, then we will issue them a two hundred and fifty thousand dollar credit against Illinois tax liability," confirms Brenda Sexton, managing director of the Illinois State Film Commission.
Most of the productions that have taken advantage of the incentive have been films—Weathermen, Ocean’s 12, Ice Harvest—but Sexton also reports that commercial production has utilized it as well, on spots for Chevrolet, Carson Pirie Scott and Euro Pro. Currently, there are five applications for commercials awaiting approval.
"Making [the incentive] more successful for commercials is a matter of time, as more people become aware of it," comments Sexton, who adds, "We have met with all the major agencies in Chicago. We have also gone to New York and met with agencies there."
The legislature is currently caught in a budget battle, and it is hard to make predictions about the extension of the program into next year, although Sexton is optimistic. "We’re so pleased with the tremendous response to and success of this program," she shares. "It’s really giving us a platform to continue to give value to producers to make this state a great choice for filmmakers."
